Ideas to Action:

Independent research for global prosperity


Views from the Center


Pranab Bardhan writes in Scientific American about whether globalization helps or hurts the world's poor.  He writes that the macro evidence is ambiguous, but gives micro examples of how globalisation has benefited individual communities, though the transition can be wrenching.

He highlights the complexity of the problem:

In 1993, anticipating a U.S.

ban on imports of products made using child labor, the garment industry

in Bangladesh dismissed an estimated 50,000 children. UNICEF and local

aid groups investigated what happened to them. About 10,000 children

went back to school, but the rest ended up in much inferior

occupations, including stone breaking and child prostitution. That does

not excuse the appalling working conditions in the sweatshops, let

alone the cases of forced or unsafe labor, but advocates must recognize

the severely limited existing opportunities for the poor and the

possible unintended consequences of "fair trade" policies.

Bardhan is optimistic about the emergence of greater coordination among transnational companies,

multilateral organizations, developing country governments and local

aid groups on programs to help the poor.  He discusses six possible measures to help share the benefits of globalization more equitably:

  • short term capital controls to protect financial stability
  • reduced protectionism by rich countries, especially on agriculture and textiles;
  • trust busting - in particular, to prevent collustion to fix international commodity prices;
  • social programs, particularly to help countries to adapt to change
  • research, including for pharmaceuticals and agricultural products.
  • greater immigration into rich countries, which he says would do more to reduce world poverty than

    other forms of international integration, such as trade liberalization,


Bardhan concludes:

Simplistic antiglobalization slogans or sermons on the unqualified

benefits of free trade do not serve the cause of alleviating world

poverty. An appreciation of the complexity of the issues and an active

interweaving of domestic and international policies would be decidedly

more fruitful.

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CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.